Finance: Pensions negotiations urged

Voluntary organisations could start negotiating with their staff to use a proportion of annual pay increases to help pay for pensions, according to a new report from the NCVO.

A Pensions Crisis? from the umbrella body's Third Sector Foresight Project looks at the implication of the Pension Commission's report on the voluntary sector.

Among the recommendations from the commission chaired by Adair Turner, former director general of the CBI, is that a National Pension Savings Scheme be established with compulsory contributions from employers of at least 3 per cent of salaries.

The NCVO report suggests that charities could soften the blow of increased pension costs by asking workers to siphon part of each annual pay increase to their occupational or stakeholder pension.

Karl Wilding, head of research at the NCVO, said: "The suggestion is that people may be asked to sacrifice some of their pay. That is an issue organisations will have to deal with, but pensions are going to have to be paid for somehow."

Charles Nall, director of corporate resources at the Children's Society, said: "Pension provision is deferred salary, so negotiating new contributions as part of the annual pay round is sensible and logical where no pension provision exists. Getting funders to fund it is another matter and highlights one area where joined-up thinking is going to be needed from government."

But Rachael Maskell, national officer for not-for-profits at trade union Amicus, said current employees should not suffer cuts in benefits to pay for future pensions. "A more strategic review of pensions in the sector is needed rather than making employees pay, particularly as many employees face job insecurity and this affects individual pension arrangements," she said.

The NCVO report argues that charities will have to discuss pensions "more explicitly" in full-cost recovery demands, especially if the Government accepts the Pension Commission recommendations.


- An NCVO report claims charities could negotiate with staff to assign a proportion of pay increases for pensions

- The paper examines the implications of the Pension Commission's report on the voluntary sector

- It also recommends that a National Pensions Savings Scheme be set up

- Amicus says employees should not suffer cuts in benefits to pay for pensions.

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